What is Federal Law 115 and why can it lead to bank accounts being frozen?

Contents:

• How Federal Law 115 Works and What Transactions Do Banks Monitor?
• How a Bank Checks Transactions and Clients
• What to Do If Your Account Has Been Blocked
• What to Do to Avoid Account Blocking
• The Main Thing About Account Blocking Under Federal Law 115 in 4 Points

Since 2001, Russia has had measures in place to combat money laundering and the financing of terrorism, established by Federal Law No. 115-FZ. According to this law, banks have the right to suspend any transactions that may appear suspicious. In such cases, financial institutions may require account holders to provide supporting documents, which helps minimize the risks of illegal financial transactions and ensure the security of the country's financial system.

Various financial transactions may come under suspicion. This applies to both cash withdrawals from a legal entity's account for salary payments and the transfer of 10,000 rubles from a personal account to a friend as a loan. We discussed this issue with a bank representative to determine how such transactions are monitored and what factors might raise suspicions.

In this article from Skillbox Media's "Business" editorial team, you'll learn about key aspects and trends in business. We'll examine current strategies that will help you effectively grow your business, and share tips for optimizing processes and increasing competitiveness. You'll also learn about best practices used by successful companies and receive recommendations for implementing innovative solutions. This material will be a useful resource for entrepreneurs and managers striving for success in the modern business environment.

• how Federal Law 115 works and what transactions are generally monitored;
• how bank transactions are verified;
• what to do when an account is blocked;
• what to do to avoid blocking.

Vyacheslav Andryushkin, Deputy Chairman of the Management Board of SDM-Bank, answered questions.

Answers to questions were provided by Vyacheslav Andryushkin, Deputy Chairman of the Management Board of SDM-Bank.

How Federal Law No. 115-FZ works and what operations do banks monitor?

Banks carefully analyze all operations in their system in order to identify suspicious payments and transactions that require mandatory control. This process includes the use of modern technologies and algorithms to detect anomalies and possible fraudulent activity. It is important to understand how exactly banks carry out such monitoring and what factors may cause additional attention from financial institutions.

Mandatory control of operations includes all actions listed in Article 6 of Federal Law No. 115-FZ. These transactions include those related to the laundering of criminally obtained proceeds, as well as those that may be linked to the financing of terrorism. For example, these may include large money transfers, currency exchange, securities transactions, and other financial activities that raise the suspicions of regulatory authorities. It is important to note that mandatory controls also include transactions carried out using anonymous payment methods or through third parties.

• cash withdrawals or deposits to a legal entity's account;
• real estate transactions totaling 5 million rubles or more;
• sending or receiving money from counterparties in countries that do not comply with FATF requirements.

Banks transmit information about such transactions to Rosfinmonitoring, which conducts its own verification of the data received. However, clients are not informed about the transfer of data: banks do not inform about it, and Rosfinmonitoring does not publish reports on the results of its inspections.

If Rosfinmonitoring discovers signs of violations in a financial transaction, it has the right to request additional documents from the bank to clarify the circumstances and initiate an investigation.

Suspicious transactions at the bank. Each bank uses unique internal criteria to evaluate financial transactions. These criteria are confidential information and are not published publicly. Therefore, it is difficult for clients to understand which transactions may raise suspicions from financial institutions. It is important to be attentive to your transactions to avoid potential problems with the bank.

Banks may pay attention to the accounts of individual entrepreneurs that have not had transactions for a long time and then suddenly receive a large sum. Questions may also arise when conducting cryptocurrency transactions for significant amounts, as well as when transferring funds to counterparties that arouse the bank's suspicions. Additionally, "splitting" payments may be grounds for a detailed investigation. It is important to remember that any unusual financial activity can attract the attention of financial institutions and raise additional questions.

Banks have the ability to monitor and review many of their clients' transactions, especially those they consider suspicious. This also applies to transactions up to 1 million rubles. Such controls help financial institutions prevent fraud and ensure the safety of their clients.

The bank independently decides how to act in the event of suspicious transactions. It has the right to:

• transfer transaction details to Rosfinmonitoring, even if it is not subject to mandatory control;
• suspend the transaction to ensure that it does not pose a risk;
• refuse to execute the transaction;
• suspend remote access to the account.

Blocking access to an account is an extreme measure that banks use only in exceptional cases. Financial institutions strive to attract clients and do everything possible to ensure a convenient and understandable interaction with their services. Therefore, banks rarely resort to blocking funds without good reason, preferring to conduct transaction checks. This helps minimize the negative impact on users and maintain trust in the banking system.

In this section, we will consider in detail the process of conducting this check.

How a bank checks transactions and the client

A bank typically adheres to the following algorithm of actions: upon detection of a suspicious transaction, it suspends it, notifies the client, conducts an investigation, and makes a final decision. This process allows banks to prevent fraudulent activities and protect the interests of clients.

Defining a suspicious transaction is an important aspect of commercial banking. This process is usually automated, which helps improve the efficiency and speed of transaction processing. The initial assessment is carried out using specialized software that analyzes all transactions according to pre-established criteria. If suspicious activity is detected, the program suspends the transaction and submits it to bank employees for additional analysis. This approach minimizes the risk of fraud and protects clients' financial interests.

A bank notifies clients that a transaction has been suspended until further clarification is received. This information is typically communicated via push notifications in the banking app. These notifications help clients stay informed about the status of their transactions and ensure the security of their financial transactions.

Banks are avoiding phone calls and SMS to communicate with clients due to the rise in fraud. This leads to mistrust among users, which in turn influences their choice of communication methods. In today's environment, financial institutions are striving to use more reliable and secure communication channels to ensure the safety of their clients' personal information.

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How to Recognize a Scam Call and Protect Yourself from Phone Fraud

Telephone fraud is becoming increasingly common, and it's important to know how to recognize a scammer. Signs of a fraudulent call may include persistence, threats, or promises of monetary rewards. If you're offered overly favorable terms or asked to provide personal information, this may be a sign that you're dealing with a scammer.

To protect yourself from telephone fraud, follow these simple guidelines. Never give out personal information, such as bank card numbers or passwords, over the phone. If the caller claims to be from a bank or other organization, verify the information by calling the official number. Block numbers that send suspicious calls. Be vigilant and don't fall for scams.

Following these simple guidelines will help you avoid losses and protect your financial interests from telephone fraud.

Investigation of financial transactions is an important process during which the bank requires proof of the legitimacy of the transaction and its implementation by the account holder. Depending on the specific situation, a financial institution may request various documents. These may include, for example, contracts with counterparties, property purchase and sale agreements, invoices, or correspondence with the recipient of funds. Ensuring the transparency and legitimacy of financial transactions is a key aspect of banking and protecting the interests of clients.

The client has the option of sending evidence via chat in the banking app or providing it in person at the nearest bank branch.

The bank has the right to send requests not only for current transactions but also for completed ones. This may occur if the client begins frequently transferring funds from their corporate account abroad, withdrawing cash, or exceeding the limits set by the bank. Such measures are aimed at ensuring the security of financial transactions and preventing fraud.

The bank's decision to conduct the transaction depends on the documents provided by the client. If the client has successfully submitted all the necessary materials and confirmed the legality and validity of the transaction, the bank will proceed with the process. The time required to complete the verification may vary from a few hours to several days, depending on the speed of the client's response to the bank's requests.

During the verification, restrictions on transactions may be imposed. For example, the bank may require the company director to personally visit the branch to process account transactions, including settlements with counterparties. In addition, only essential transactions may be permitted on the account, such as employee salaries, office rent, taxes, and other mandatory payments. These measures are aimed at ensuring the security of financial transactions and compliance with the law.

What to do if the account is blocked

If the client does not respond to the bank's request regarding the nature of the transaction for an extended period of time, or if the transaction raises suspicions of illegality, the bank has the right to block remote access to the account and terminate the agreement with the client. This is a measure aimed at protecting the financial interests of both the client and the bank, preventing potential fraud or violations of the law.

To unblock remote access to an account, you must contact the bank and provide proof of the legitimacy of payments and transfers. The most effective method is to visit the bank in person with documents, such as contracts. This is usually sufficient to successfully resolve the issue. The bank will review the materials provided and make an appropriate decision.

What to do to avoid account blocking

There are several basic recommendations that will help minimize the risk of account audits or remote access blocking. First, regularly update passwords and use complex character combinations. Second, activate two-factor authentication, which will add an additional layer of security. Third, monitor your financial transactions and promptly respond to suspicious transactions. It is also important to avoid using public Wi-Fi networks to access banking services. Finally, regularly review your account security settings and update the software on your devices. These simple measures will help keep your account secure and accessible.

Properly handling routine account transactions for sole proprietors and legal entities is an important part of financial management. Timely payment of salaries, contractors' services according to contracts, and rent—all these processes must proceed without delay. If a client regularly withdraws cash and fails to pay their invoices through the bank, this may raise suspicions from credit institutions. Therefore, it is important to monitor financial flows and maintain transparency in payments. This not only strengthens business relationships but also promotes business stability.

Specify the purpose of payments for individuals, for example, "on loan" or "birthday gift." If you plan to lend a large amount, it is recommended to additionally draw up a loan agreement and have it notarized. This will help avoid misunderstandings and protect your interests in the event of a dispute. Properly documenting financial transactions ensures the transparency and security of your financial operations.

Verifying your counterparties is an important part of doing business. You can use the Central Bank of Russia's "Know Your Customer" platform for this purpose, as well as the websites of the Federal Bailiff Service (FSSP) and the Federal Tax Service (FTS). These resources will help you ensure the reliability and integrity of your partners, which will reduce risks and ensure the security of your business transactions.

There are situations where a company operates legally but collaborates with an unreliable contractor. In such cases, the bank has the right to request an account audit to ensure that the organization is not involved in illegal activities within its business chain. This is important not only to protect the bank's interests but also to preserve the company's reputation. Therefore, organizations should carefully select their partners and undergo the necessary checks to avoid possible negative consequences.

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Counterparties are legal entities or individuals with whom an organization enters into business relationships. Due diligence on counterparties is essential to minimize the risks associated with financial losses, legal sanctions, and reputational threats. Paying counterparties over 100,000 rubles should be done with caution, as this may attract the attention of tax authorities and lead to additional audits. Understanding the status and reliability of a counterparty helps prevent fraud and ensures compliance with tax laws. Therefore, thorough due diligence on counterparties is an important part of a company's financial strategy.

Respond to bank inquiries in a timely manner. Even if you made a mistake in your documents, such as providing an incorrect account number, you can quickly correct the situation by responding to a bank representative without delay. Prompt communication will help avoid further problems and expedite the resolution process.

The Central Bank of the Russian Federation provides guidelines for individual entrepreneurs and legal entities. These guidelines provide information on how to minimize the risk of increased scrutiny from banks. By following these recommendations, organizations can optimize their financial transactions and establish more effective interactions with credit institutions.

The main thing about blocking an account under Federal Law 115 in 4 points

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